Tenstorrent, a Canadian startup led by chip industry veteran Jim Keller, has announced securing $100 million in funding from prominent investors, including Hyundai Motor Group and a Samsung investment fund. This influx of capital, in addition to its previous funding totaling $234.5 million, has propelled Tenstorrent’s valuation to $1 billion. The startup is positioning itself to compete with Nvidia, the dominant force in supplying chips for artificial intelligence (AI) products, including technologies like ChatGPT.
Jim Keller, renowned for his work on chip development at companies like Apple, Tesla, and Intel, assumed the role of CEO at Tenstorrent earlier this year. The funding comprises $30 million from Hyundai and $20 million from Kia, while the remaining $50 million comes from Samsung’s Catalyst Fund and other notable investors such as Fidelity Ventures, Eclipse Ventures, Epiq Capital, and Maverick Capital.
Despite targeting Nvidia’s stronghold in data center chips, Tenstorrent is also dedicated to producing AI chips for a diverse array of applications. Notably, the startup recently announced a partnership with LG to develop chips for use in smart televisions.
The investment was structured as debt, with plans for conversion to stock in the future. This approach implies that a definitive new valuation for Tenstorrent will not be established until a subsequent equity fundraising round, which the company anticipates conducting next year. Details regarding the convertible debt remain undisclosed.
While Tenstorrent is producing its own AI chips, it is also offering its intellectual property and technology to other enterprises seeking to manufacture their own AI chips. Hyundai, for instance, established a semiconductor development group and intends to leverage Tenstorrent’s technology in future Hyundai, Kia, and Genesis vehicles.
Heung-soo Kim, Executive Vice President and Head of the Global Strategy Office at Hyundai Motor Group emphasized the investment’s strategic importance. He stated that the group anticipates harnessing Tenstorrent’s expertise to develop differentiated semiconductor technology, enhancing AI capabilities and contributing to advancements in future mobility solutions.
As Tenstorrent secures this substantial funding and embarks on a journey to reshape the AI chip market, the tech industry eagerly awaits its developments and potential disruptions to the existing landscape. The infusion of capital and support from industry giants like Hyundai and Samsung underscores the growing significance of AI chip technology and its role in shaping the future of various industries.